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The Boy Who Cried Wolf

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
January 12, 2022 5:52 pm

The Boy Who Cried Wolf

MoneyWise / Rob West and Steve Moore

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January 12, 2022 5:52 pm

We’ve all heard the story of the boy who cried wolf. After the second or third time with no wolf to be seen, people stopped believing him. On today's MoneyWise Live, host Rob West will talk with economist Jerry Bowyer about the financial alarmists who are crying wolf about our economy being on the brink of collapse. Then Rob will answer your financial questions from a biblical perspective.

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We've all heard the story of the boy who cried wolf.

After the second or third time with no wolf to be seen, people stopped believing him. Hi, I'm Rob Lest. That boy has nothing on some of the financial alarmists crying wolf today about the economy. Is our banking system on the brink of collapse?

Are we headed for hyperinflation? I'll talk about that today with economist Jerry Boyer. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live. Biblical wisdom for your financial decisions. MoneyWise contributor Jerry Boyer is the financial editor at townhall.com and author of The Maker vs.

The Takers. What Jesus really said about social justice and economics. Jerry, great to have you with us again. Rob, it's always a pleasure to be with you. I really look forward to these conversations.

I do as well. And Jerry, as you know, last time we talked about the national debt crisis, and while that's certainly something to be concerned about, you helped us put things in perspective as you always do, and certainly with a biblical underpinning. Today we're going to take a look at the state of the US banking system, among other things. There's some fear-mongering going on out there if you watch the financial shows, and certainly among the Christian community as well, related to this topic. So Jerry, is The Boy Who Cried Wolf a good analogy for some of the economic forecasts we're seeing today?

Yeah, I think it really is. I mean, I like this fable of The Boy Who Cried Wolf. It's from Aesop. By the way, my friend Rabbi Daniel Lapin makes a pretty good argument that Aesop was a Jewish slave. Joseph, Aesop, Osip, who had been captured, and so reflecting kind of a biblical wisdom like the book of Proverbs, which has stories about animals as well. And Jesus actually quotes Aesop later when he talks about wolf in sheep's clothing. So I think it's a great analogy, but I think one of the things we have to realize about it is it's kind of about two things, right? The boy cries wolf, there's no wolf, but he gets attention, so he likes that.

Happens again, he gets attention, and he likes that. In Aesop's version, the wolf comes, he's not believed, and the wolf eats the flock. In the later versions that we learned as children, it's changed so that the wolf eats the boy. And I think there's an important point here, which is we think of this as a warning story to the boy, but it's mainly originally a warning story to the village. So it's not just saying to the boy, hey, don't lie, which is certainly true. It's also saying to the village, if you have a liar, he might lie, he will lie, and he'll be wrong, but sometimes he'll be right, and you need the discernment to know when he's right and when he isn't. Wow, I love that distinction because I think that really puts it into perspective as to how we should approach this as we apply this fable to what we're describing today. And as you point out, Jerry, the other side is true as well. There are folks who can ignore real warning signs, and I take it that you're somewhere in the middle on this particular topic, is that right?

Yeah, I am. So there have been a lot of false warnings about banking collapses. There have been a lot of false warnings about hyperinflation, especially in our community, the evangelical Christian community.

Glenn Beck used to talk about it's going to happen next week. There were videos that went around from Porter Stansberry, and I know a lot of people you know who are advisors were saying, what do we say to all this stuff? There was a blood moon scare. This stuff just keeps going on and on. And so what that means is there have been people crying wolf and it didn't happen. And then what happens is the village gets hardened so that it's like, oh, that again. Yeah, you told me there'd be hyperinflation before. So what I found is last year I started talking to you about inflation as a rising risk. A lot of people just didn't want to hear that because there had been so many false predictions that they just kind of got used to saying, well, the boy's a liar.

We can't trust him. When the point isn't the boy, the point is the wolf. Is he there? Is there something on the horizon? What is it? Maybe it's a puppy.

Maybe it's a wolf. And so how can we develop the discernment to see that there really are terrible things that happen. There are collapses.

You mentioned my book earlier. I'm very convinced that Jesus was arguing about the destruction of Jerusalem, which came about partly because of a debt crisis. But there had been a lot of other people who said the world's about to end and the world's about to end and Jerusalem's about to be destroyed.

But it wasn't. So I think we have to kind of be in the middle to recognize genuine risks, but not be running around like chickens with our head cut off all the time, always in a constant state of fear and making false predictions that people believe and then get jaded about. Yeah, that's very helpful.

And I think the key word you said is discernment. Well, we'll continue to unpack this, the banking system, inflation and much more with Jerry Boyer. Stay with us. We're delighted to have you with us on MoneyWise Live. Joining us today, our contributor and resident economist, Jerry Boyer, Jerry's financial editor at townhall.com. And we're talking about perhaps some financial alarmists that are saying the U.S. banking system is on the brink of collapse. What about the banking system? And inflation obviously has creeped up on us. What does that mean moving forward and is hyperinflation in our future?

Jerry, you set the stage really well before the break. Let's dive a bit deeper into this beginning with the U.S. banking system. How should we view it? And those who are saying perhaps we should exit the banking system altogether because it's a house of cards. What would you say to those folks? Exit to where? Right. I mean, you have an exodus from Egypt because you have a promised land to go to.

What's the promised land? I think that when people are driven by a fear response, they're not always thinking rationally about how to deal with that fear. So let's say that we're going to have a bank collapse and hyperinflation. For some reason, I'm hearing people say, well, what I really need to do then is take all my money out of the bank and then just hold it as cash.

Well, wait. I mean, if you're worried about hyperinflation, holding cash is a guaranteed way to lose purchasing power. So I mean, maybe your scenario is right. Maybe this is the big one, as Fred Sanford would say. Maybe it's coming, the hyperinflationary earthquake. But then, you know, hoarding cash would not be the rational response to that.

So I think people have to kind of think maybe a little bit more strategically about this. So, you know, what about banking collapses? We do periodically have banking collapses in U.S. history, and that's because we have a system called fractional reserve banking.

I don't want to get too technical. But what that means is when you put money in the bank, they don't keep most of it. Most of it they turn around and lend out. So there's more lending out than there are reserves, you know, in their vault to cover it. So when everybody comes and says, I want to take my money out, that's called a bank run, and then they can't cover all that. Remember in It's a Wonderful Life, you know, there wasn't enough money because it's over in Martini's house, right? So banks can be subject to bank runs.

So there's always that vulnerability in our system. But when we've had bank runs in the past, we've had very little reserves. Banks haven't had much in the vault. I just looked at the data before coming on the show today, and we actually have pretty high reserves. The banks are very well reserved. After 2008, the government said, we don't want to be stuck this way again.

We want you to over, over, over reserve. So it doesn't seem to me, unless we get some kind of weird new regulation or the globe dumps treasuries and the banks have treasuries in their vault. And so, you know, they would go down in value. It doesn't seem like a banking collapse is a most likely or a highly likely scenario in the short run.

Given, not that I'm denying they happen, but I don't see the preconditions that caused them to happen in the past. Yes. And Jerry, to your earlier point, where do you turn? Because as we've talked about before in 2008, 2009, when there were real systemic problems in the financial markets as a result of the housing collapse, we actually saw the dollar rally because the question is, where do you turn?

What other economy, what other reserve currency would you look to other than the US? That's a real question to ask, isn't it? Yes, it is. So you have to, if you're selling something, then you're buying something, right? I mean, a transaction has two sides to it.

So if you don't want the dollar, then what do you want? The yuan? Well, China's under enormous pressure because they're going kind of crazy with nationalizing businesses and cracking down on markets. There's a real fascist kind of, you know, side coming out with China.

Japan sells more adult diapers than baby diapers. It's really hard to imagine the yen is a good long term bet. So where do people go? Well, they can go to gold. Gold prices are high, but that's your traditional hedge against a dollar collapse. You can go to TIPS, which is a kind of treasury that protects against inflation. But the prices of those have gone up a lot because we've had inflation. So, you know, it might be, you know, kind of richly valued.

Now, what's happening with a lot of people is they're going to crypto currencies like Bitcoin. And, you know, I think what that reflects is kind of imagine that you're in a big room. There's a dance going on. There's an auditorium and there's someone says fire, but there's no fire. And then someone else says fire. But there's no fire. Then later in the evening, you smell a little smoke and then you go to an exit door and you don't know what that exit door goes to.

But you're you're you're scared enough that you're going to go through that exit door, even though you're not quite sure what's on the other side. And that's what I see with what's going on on crypto currencies. I'm not making a recommendation to buy them, nor a recommendation not to. That's a separate topic. All I'm saying is the run up in Bitcoin and other crypto currencies reflects people's desire to take an exit door to something they don't fully understand because of the fear about the dollar.

So that's another. So how do you hedge against dollar? You buy foreign like emerging markets tend to do well when the dollar's inflationary. Commodities tend to do well when the dollar's inflationary, particularly gold, but really all the commodity complex inflation protected bonds like tips tend to do well. And it looks like crypto currencies also are a hedge.

But be careful. Really, they're highly volatile. And, you know, people might put up one percent or something like that and don't think of crypto as like a real investment strategy. Well, perhaps part of the attraction to cryptos is the lack of central bank oversight. Jerry, let's talk about the Fed. Do they have their thumb on the scales and have they run out of tools as they've opened the spigots on monetary policy? I don't think they ever run out of tools in the sense that they have an infinitely expandable balance sheet.

There is no mathematical or logical limit on how much money they can create. So what disciplines the central bank? Well, it's supposed to be politically disciplined. They're supposed to follow rules. It's perfectly clear that they're not following rules.

They're just following the rule of don't make anyone mad by taking away the punch bowl when the party's going. So then what tends to happen then is the rule is imposed by outside. So eventually people say, I don't trust the dollar anymore. Central bank, you know, we just don't want your dollars.

We don't trust you. And that's the scenario that people are running. That is a reasonable scenario of us having a currency crisis and a debt crisis. But from my lights, you know, Lord, give me wisdom to discern I don't see that kind of collapse or hyperinflation in the near term. I do see it as an actual risk to be managed for the first time in my life. I'm saying, no, this is real and we ought to be thinking about how to managing it, be managing it. But that's entirely different than the whole dollar is going to collapse. The banking system is going to collapse, you know, put it all into freeze dried food, you know, food and shotguns or bury it in the yard.

There's a kind of panic enos about hyperinflation right now that I think is maybe out ahead of the actual risk level. Jerry, just about a minute left. We could talk all day about this.

Let's end today by allowing you to recenter us on where our trust ultimately should be placed. Well, I learned something interesting about Aramaic grammar recently. What's Aramaic? What's the language that Jesus spoke?

And here's what I learned. There's a word called Mammon, and we tend to think that Mammon means money. But Mammon, it's very close to another Aramaic word.

Amen. It's an amen plus an M in front of it. The word Mammon is based on the word Amen.

So what does that mean? Mammon isn't money. Mammon is money we say Amen to. When we say Amen, we say only Amen to God. Only he is to be trusted. That's what Amen means.

This can be trusted. So when we turn it when we put when you say Amen to money, we turn it into an idol called Mammon. And we need to place our trust in the Lord. Jerry, thank you for giving us a biblical perspective today on all of this. God bless you, my friend. God bless you. All right.

Stay with us. MoneyWise Live will be right back. Financial.

Do you want to follow up on something Jerry said? Perhaps it's how you should approach some concerns you have about the financial system. Maybe it's investing or saving for the future.

Maybe it's paying down debt or credit scores. Whatever it might be, we'd love to hear from you today. Again, lines are open. 800-525-7000.

Give us a call right now. You know, I always appreciate our time with Jerry Boyer, our good friend, because he recenters us. You know, he's an economist, but he's also a student of the Scriptures and really understands and takes to blend his history, his understanding of God's Word with really the data from today as an economist.

What do we see on the horizon? He reminds us often that data means gift. And data is a gift. It can tell us things about what might be coming. Ultimately, our trust is in the Lord. We only have to know that he's in control, but we also want to be wise stewards of God's money. And I appreciate him recalibrating us around biblical truth and up-to-date information about what we're facing here in our economy and the stock markets. Could it be a challenging year?

Well, it certainly could. But our trust is in the Lord. And at the end of the day, what I believe we need to recognize is there's God's part and our part. We need to leave to the Lord what he is ultimately responsible for. But for us, what passes through our hands as stewards of God's money? Well, that's our part. What are we doing to make sure we're living within our means? We're avoiding the use of debt unless it's necessary, that we have some margin in our financial life. There's some surplus there that we can use to fund our goals, that we have set long-term goals and that ultimately we're giving generously. And if we do those five things, we put ourselves in a position to experience God's best. It doesn't mean there won't be challenging times, but it means we've done our part. We trust the Lord for the rest. All right, let's head to the phones today. 800-525-7000. We're going to begin all the way out in Washington. Serena, thank you for your call today.

How can I help you? Hey, so I'm wondering if it's a good idea to invest in gold right now. It seems like the dollar is losing its value day by day and my husband and I have some cash saved and I feel like it's not going to be worth anything soon. Yeah, you know, I would not be investing in gold per se if you're thinking about overweighting.

I think the sound approach of really focusing on 5% allocation at the most 10%, but I would say for most folks 5%, is really the right approach. You know, gold is a hedge against a falling stock market, a falling economy. It's a store of value.

It is uncorrelated, meaning it should move in the opposite direction in most cases of the stock market. The challenge is that, you know, Serena, just historically speaking, it has been more volatile and there has been less return that you would achieve from the precious metals. And that's just if you're buying like a tracking exchange traded fund that's tracking the price of the metal itself. You know, if you're to buy physical gold or take physical possession, then there's other challenges, which is how do we store and safely secure the precious metal?

When we buy and sell, what about the markups for the dealer that we might be buying or selling through? And then how do we use it? If it's there because we're concerned about what Jerry was talking about a moment ago, and that is a banking collapse, well, how do you convert that into a means of exchange in a way that's practical?

So I think for those reasons, I would avoid really moving into gold as a long-term play and overweighting there, just because I don't think it will perform as well over the long haul as a properly diversified stock and bond portfolio that's appropriate for your age and risk tolerance. There obviously would be many folks that would disagree with that. That's just my approach.

But tell me your thoughts. No, I definitely understand. And I agree with you on how would you go about using the gold in the situation of our whole economy and the bank collapsing. So I understand what you're saying. I'm going to look into maybe doing some other things, but I'm not a risk-taker.

I don't want to risk the money that God's given to us to have hold of. So I appreciate your time, and thank you very much. Well, I'm happy to do it. Serena, thank you for listening and calling today. We appreciate it. Linda's in Chicago. Linda, how can I help you today? Good afternoon.

I am so glad, and thank you for taking my call. I have a question about my long-term health insurance. My rate was increased in November, and it will be doing that for at least the next three years. And it's just really taken a toll on me. And I'm wondering if it's worth it for me to continue with it. I don't have any great savings. I'm retired, and I just would like your advice.

Yes. Well, the challenge with long-term care insurance is that, yes, it's a great product in the sense that that's likely your biggest risk in this season of life, given the rising cost of health care and how expensive it is for the various types of care, be it nursing home care or assisted living or even in-home care. And so it can erode assets in a hurry. The challenge is the insurance is only as good as your ability to continue to fund it as a part of your spending plan long-term. And what you're experiencing has been what others have experienced as well, and that is that because of the rising cost of health care, even though they have to do it across the board, they can't do it based on an individual policy. Across the board, folks have been experiencing these increases in the cost or the premium related to these policies.

And that has, in some cases, pushed it out of their reach. So I think the key is, I would talk to an insurance agent just to say, is there anything that can be done? But long-term, you need to make sure that you can continue to afford it. Otherwise, if you have to drop it at some point, it's of no value to you and you've lost that premium. So I would look into that to see whether it is sustainable. Hopefully, you've experienced the bulk of the increases and it will level off and you can carry that in your budget.

I think it's a good thing, though, if you can afford it, to make sure that you've got something to protect against that significant potential cost that 70% of Americans over the age of 65 will have to pay for for between two and three years. Linda, thank you for your call. MoneyWise Live will be right back. Stay with us. Welcome back to MoneyWise Live.

Thanks for joining us today. This is biblical wisdom for your financial decisions, taking your calls and questions on anything financial. Here's the number, 800-525-7000.

That's 800-525-7000. We've got some lines open and we'd love to hear from you. Hey, have you downloaded the MoneyWise app? Well, it's available. I think it's the very best digital envelope system on the market. My family and I use it.

I think you should check it out. You can do so wherever you download your apps. Just search for MoneyWise Biblical Finance and you can download it today. Before we get back to the phones, let's take an email question. This one comes to us from Shirley, and she says, I got a call from someone who said they were from Social Security. He had my correct name and zip code. He told me that they're issuing new cards and needed to verify my number over the phone. I did not give it to him. Did I do the right thing?

And Shirley, you absolutely did the right thing. Here's what you can be sure of. The Social Security Administration will never, ever call you and ask for your Social Security number. They won't ask you to pay anything.

They won't threaten your benefits either. If any of those happen, you'll know that it's a fake call. You should hang up right away. Could they call you?

Sure, if you opted into that, but they would typically contact you through the mail first, but they will not ask you to pay for anything and certainly it won't be with a gift card. You can know for sure of that. They will never threaten you and they will not ask for your Social Security number.

So Shirley, good job on spotting that. There are so many scams out there these days that we need to be on our guard. If you're suspicious, hang up and call whoever it is directly and make sure you get the number directly from them. And you can do that on their website. Don't Google it and click the link to get to the site of the vendor or the company you're trying to reach. Go directly to their site. You put in the address. Go to their site and then find the customer service number and call them directly if you're suspicious.

Don't respond to somebody who's contacting you, especially over the phone or by text if they're asking for your sensitive information. We appreciate your email, Shirley. If you have a question, you can send it to us, questions at MoneyWise.org. We try to answer a few each week on the air. All right, let's go back to the phones. We've got some lines open today on MoneyWise Live, 800-525-7000. We'd love to hear from you. Lynn is in Illinois. Lynn, how can I help you? Okay, thank you for taking my call.

Just have a quick question for you. I have roughly $65,000 left on my 30-year mortgage, but I'm down to 15 years. And the current interest rate is 6.25%.

And I was wondering, I could possibly – the credit score is just a few points away from 800, so I've already called just to check and I could get a 3.25% interest rate at this time with the $5,100 closing cost. However, should I do that? Should I refi or should I just do nothing at this time and just continue with the 6.25% and just pay off the remaining 15 years?

Yeah. So are you planning just to send the scheduled monthly payment, Lynn, or are you accelerating the payoff of this? We're trying to accelerate the payoff.

Okay, very good. I like the idea of refinancing. I assume interest rates were higher when you got this 15 years ago or you had a lower credit score or both.

Nevertheless, here's the key. As long as you plan to stay in this home and you get a new mortgage – and I would encourage you to get a new mortgage at no more than 15 years, so I'd be looking at a new 15-year mortgage – then what you've done is you've matched the remaining term, you're not extending it, and you've lowered the interest rate. But given how significantly the interest rate is going to come down, three percentage points over the next 15 years will absolutely pay off. The money that you will save in interest will more than make up the cost of the refi that you would be experiencing. Now, the only thing that gives me pause is what you said about the closing costs. I believe you said somewhere between $5,000 and $6,000. That's high for a $65,000 mortgage. I would love for you to try to target paying no more than 3% of the mortgage value for the total closing costs and expenses. That's around $2,000, not $5,000 or $6,000.

So I would get at least a couple of other offers. I would check with your local bank, but I'd get at least two from online lenders. I would look at Bankrate.com. We want at least three offers, and I would be looking for a rate at or below 3% with a 15-year mortgage with a credit score of 800.

I'd be looking for closing costs of no more than 3% of the mortgage value, and I would absolutely make sure you don't go with a term longer than 15 years. Does that all make sense? Yes, that makes perfect sense. I just have one other question for you, and I should have mentioned it up front. It is an FHA loan, so would it be possible to convert that to a conventional?

Oh, sure. One of the benefits you'll have with converting to a conventional is you won't have to have the private mortgage insurance because you have far more equity than the value of the mortgage. Conventional mortgages only require the PMI if you have less than 80% equity, whereas the FHA will require it with more than that. So you'll save on that, and converting to a conventional I think will do just fine.

So essentially, this new conventional mortgage, the proceeds will go to pay off the existing FHA mortgage and replace it with a new mortgage. Correct. Okay. All right, excellent. Thank you so much. Okay, Len, thank you for calling. God bless you. We appreciate it. 800-525-7000 is the number to call. Whatever's on your mind today, financially speaking, is it savings or giving, perhaps it's lifestyle, putting a spending plan in place or paying down debt?

Whatever it is, we'll apply God's principles to what you're dealing with in your financial life today. We'd love to hear from you. Again, lines are open. 800-525-7000. Joanne is in Aurora, Illinois.

Joanne, how can I help you? Hi, just a quick question as well. Having cash on hand, is there a rule of thumb based on your earning or just what makes you feel comfortable? And is there certain, you know, should it be 20s, 50s, 100s?

Yes. Well, I think the idea is a couple of things. Number one, for your emergency fund, most folks would recommend as a rule of thumb and I would certainly agree that you should have three to six months expenses. Now, that's not cash on hand at home. I would have that in an FDIC insured savings account. I would recommend using an online savings account so you can get half a percentage point worth of interest each year with no fees for that savings account. And then I would link it electronically to your checking account so that it's only an ACH transfer away two to three days at the most if you need it for an unexpected expense. In terms of cash around the house, you know, most folks recommend you set aside about a thousand dollars, you know, would be the conventional wisdom that you will see as a common rule of thumb. The idea is that you would want that in a safe place. But if there was a disruption of some kind, whether it's a natural disaster or something that caused you to not be able to access some cash, that you'd be able to cover your expenses for three to five days and that's where that $500 to $1,000 in a safe would be a really good thing.

And that could include a glitch in the banking system. So that would be my best advice. Does that make sense? Great. That's perfect. Thank you. All right. Thank you very much for your call. We appreciate it. We'll be back with much more on MoneyWise Live after this short break. Don't go anywhere.

We do got some lines open. Looks like 1-800-525-7000. By the way, if you're looking for an advisor that shares your values, we recommend the Certified Kingdom Advisor designation. It's our trusted designation for professional biblical advice. You can find a CKA near you at MoneyWiseLive.org.

Stay with us. Thanks for tuning in to MoneyWise Live. I'm Rob West, your host. Hey, check out our website when you get a chance. MoneyWiseLive.org, some great content and articles, the best podcasts in biblical finance. You'll find it all there. We've got some excellent articles right now on our homepage talking about predictive ability being overrated related to your investing, the value of financial goals, especially here at the beginning of a new year, being able to think about goal setting, and Ron Blue.

How do I live in light of economic uncertainty? A great video that's there for your enjoyment. That plus much, much more when you visit MoneyWiseLive.org. By the way, while you're there, create a free MoneyWise account.

It's quick and easy. That will ensure that you get our MoneyWise Weekly Wisdom email. Our next installment goes out tomorrow with our trending articles and podcasts. I'll share a thought with you for the week, our scripture of the week. It's all there to help you continue to grow in your understanding of biblical wisdom as it relates to financial decision making. It's called our MoneyWise Weekly Wisdom email. More than 50,000 people receive it every week, and we'd love to make sure you're one of them.

Again, just create a free account when you visit MoneyWiseLive.org. Well, the lines are full. Let's take as many calls as we can between now and the end of the program. Leona's in Fort Lauderdale. Leona, how can I help you? Hi, Leonie. Good evening. I just wanted to... Leonie, I apologize.

That's fine. I have two nephews who are under the age of 10, and I wanted to start putting money aside for their college. Their parents are seemingly not interested in their tertiary education, so that's something I wanted to try and do an investment in. I want to know what would be the best option for them.

Yes. I'll tell you, my favorite tool, Leonie, for saving for college is the 529 savings plan. Now, there in the state of Florida, you have two options. You have the prepaid plan or you have the 529 college savings. I prefer the college savings. I think even though college tuition inflation has been significant, I think the ability to save through the tax-free growth of the investments inside the 529, even though you don't get a deduction, you get the tax-free growth so long as you use it for qualified educational expenses, is a real effective tool. So essentially, what you would do is you'd open up a 529 account, and then you could decide how much you want to put in, whether that's a lump sum that you've been saving or a specific amount you want automatically deposited every month, and you can change that at any time.

Once the money goes into the 529, then you would select among the investments inside the plan, and then you would just continue to dollar-cost average into the market. As it grows, again, that money would be available for qualified educational expenses. And if they get a scholarship or a grant, you'd be able to take the money out on a pro rata basis, so you don't have to worry about that. And if it's not all used, you could transfer it to another child for their use. The best website to determine which state's 529 is best for you is called savingforcollege.com. When you go through the questions and answers, they will recommend, based on very recent ratings of all the 529s across the country, which one is the very best plan for you.

You can open one for each child, and you can start funding it with as little as you want to get going, and then add to it over time. Does that make sense? Yes, it makes a lot of sense, and thank you so much for that information. I appreciate it. Okay, Leonie, thank you for thinking about those sweet nephews of yours. I'm sure they'll be incredibly grateful down the road when you're there to help them provide some funding for college. We appreciate your call. We're going to stay in Florida, where Eileen is, and how can I help you?

Hi. I would like to know the most economical way to open a solo 401k. Okay. When you say the most economical way, tell me what you're thinking about there. Well, I've talked to several companies, and so far it looks like the companies are charging $500 for the initial fee, and then $100 a year after that, so they do all the paperwork regarding taxes and everything.

Okay, yes. Well, a solo 401k is a great opportunity for somebody who wants to put away more than they can put away in an IRA, and they don't have a 401k available at work because they're self-employed. They also are less onerous in terms of the administration and the ongoing cost of it. Most of the online brokers do offer solo k's, so I think you're going to have a number of options to consider, and so I would just look around. There's not one in particular that I would recommend, but a lot of the big names come to mind in terms of who is focused on low-cost offerings. Charles Schwab would be one. Fidelity would be another. You could also go to investopedia.com. I know they rank the solo 401k companies. For instance, their most recent ranking of 2022 at investopedia.com has Fidelity as the best overall and Schwab for the lowest fees, Charles Schwab.

So those would be two names that I think you couldn't go wrong with, but to read up more on that, I would do some research, and again, Investopedia has a brand new ranking of the six best solo 401k companies. All right? That's marvelous. Thank you for your time. All right, Eileen. Thanks for your call today. God bless you. Let's stay in Florida, North Miami Beach. Kayann, thank you for your patience today. How can I help you?

Hi, Mr. West. I was wondering if you would be able to suggest any mortgage lenders for people with not-so-good credit? Yeah, mortgage lenders. You know, many lenders who will give a mortgage to someone with low or poor credit, they'll issue government-backed FHA loans and VA loans, if you qualify, to borrowers with credit scores as low as 580.

That's where often the FHA loans are used. Some even start at 500 for FHA loans, although these lenders are harder to find. What is your credit score? Both my husband and I's are 600. 600 and 620.

Okay. So with a credit score above 600, your options open up even more. Conventional mortgages generally require a 620 to qualify, so it would just depend on whether they're requiring your income as well.

If so, your 600 may create a bit of a challenge. Once you get up to 680 or higher, you can apply for just about any home loan. But I would check Bankrate.com.

That's my favorite website for finding who has the best loan programs. And you'll be able to put your credit score in, so the results they give you on recommended lenders will factor in the credit score that you're providing. So you may have to go with an FHA. You're right on the border for qualifying for a conventional. So I'd do your homework, especially given your low credit score. The other thing you may want to consider is delaying this, because if you can focus on keeping your payments on time, getting your debt-to-income ratios down, getting your credit utilization down, which is the amount you owe versus what's available to you, let's say on credit cards.

And if your credit score is rising and you can both get above that 620 mark, which is not far away, then you may be happier with a conventional mortgage, which, if you've got 20% equity in the home, will ensure that you don't have private mortgage insurance. Does all that make sense? Yes, it does. Thank you so much. I appreciate it.

Okay. God bless you, KN. We appreciate your call today. We're going to finish in Florida. Lots of calls from Florida today. Gary, thank you for your patience.

How can I help you? Is selling covered calls a good strategy for investing when you're retired? You know, it can be if you know what you're doing. I mean, it's a popular options strategy, and it's about generating income. You might think of it as renting out your stocks. So if you only expect a minor increase or a decrease in the underlying stock for the life of the option, when you execute a covered call, that's generally where folks use it, you would hold a long position in the asset, and then you sell or write the call options on that same asset to generate additional income. It may be called away from you, and so you could lose it, which would create a taxable event.

So you have to understand that. The risks are, you know, the real risk of losing money is if the stock price declines below the breakeven point or the opportunity risk of not participating in a large stock price rise because you lose it. But if your focus is income and you understand what you're doing, I'm certainly not opposed to it.

Back when we used to manage money for lots of folks, we used covered call strategies all the time. But you have to understand the implications of it and what you're doing, but it can be a way to generate some additional income. So I'm certainly not opposed to it, Gary. Thank you very much. Okay, God bless you, sir. We appreciate your call. Well, folks, that's going to about do it for us. Let me see if I can sneak in one quick email here just so we can get one more in today before we finish. This comes from Roxanne, and I'm just glancing at her message, and I promise I didn't set her up for this. Roxanne writes, I want to go on a budget. I think I need a push and some encouragement. I have a smartphone.

I've listened for a long time. Where do I start? And that's a perfect setup, because the MoneyWise app would be a great tool. But let me start with the encouragement. You know, Roxanne, it is critical as a steward of God's money that you have a plan for your money, that you have guardrails that say of what God has entrusted to us, the income that we have, here's how we're going to live. Here's the plan, so we can give first, and we can cover our fixed and discretionary expenses, and we can live below our means so we have margin to save and to add to our giving as the Lord leads, and to pursue whatever goals He's given to us. You can't do that without a spending plan, and it really requires that you have a system to control the flow of money in and out, and that's why I like using your smartphone to manage that. Our money management system in the MoneyWise app was flexible. It'll give you everything you need.

You can download it where you download your apps. Just download the app called MoneyWise Biblical Finance. Roxanne, we appreciate your email. Folks, that's going to do it for us today.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to Deb Solomon, Amy Rios, and Jim Henry. Thank you for being here as well. Come back and join us tomorrow. I'll look for you then. God bless you. Bye-bye.
Whisper: medium.en / 2023-06-28 14:48:09 / 2023-06-28 15:05:02 / 17

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